Just one in 10 of Britain's battered consumers believe the economy is in good shape, one of the lowest readings of any developed country, according to new research by polling group Ipsos Mori.

In a fresh blow to George Osborne's claims to have steered the UK out of the doldrums and laid the foundations for recovery, economic confidence, at just 10%, is weaker than in all of the 23 other countries Mori surveys, apart from France, Spain, Hungary and earthquake-hit Japan.

While more than two-thirds of Germans and three-quarters of Indians are upbeat about the economic situation in their country, even the phlegmatic Brits are beginning to wilt under the pressure of falling real incomes, a stagnant housing market and stubbornly high unemployment.

Bobby Duffy, Ipsos Mori's managing director, said: "It's understandable that the majority of Britons in the current situation hold a negative view of the economy; house prices are absurd and the cost of living is increasing rapidly in comparison to earnings. There is rightly a lot of pessimism out there, which will have an impact on growth and our economic recovery."

When they were asked to assess the outlook for the coming six months – a critical period for the UK if the Treasury is to achieve its deficit targets – the same proportion, just one in 10, said they expected the situation in their local area to improve. Only France and Japan registered weaker readings.

Consumers in developing countries, which are driving growth in the global economy, are among the most optimistic, according to Mori's survey: confidence stands at 75% in China, 52% in Brazil and 49% in Turkey, against a global average of 40%.

Britain's reading of 10% was actually moderately stronger than last month, when it slipped to just 8% – the lowest since the aftermath of Lehman Brothers' collapse in the autumn of 2008.